Another 3 seconds of fame on Fox 40 News...

If you follow me on Facebook or Twitter, you probably already know that Fox 40 reporter Chris Biele interviewed one of my buyer clients on Friday at my office. The story he did was about opportunities for first time home buyers in the Sacramento real estate market (e.g. affordable home prices, tax credit, etc.), and in turn the opportunities available to renters given that so many folks are vacating their rentals in favor of buying a home.

I am shown for a few seconds while my buyer client is interviewed, and the exterior of one of my Garden of the Gods listings at 4320 Morpheus Lane is featured. Cool beans...

New Listing - 12277 Habitat Way, Rancho Cordova, CA 95742

Classy newer 4bed + loft, 3 bath Rancho Cordova Home - no HOA dues! You will love the downstairs bedroom & full bath, separate living & family rooms, formal dining, large 2nd floor loft area, stunning kitchen with granite counters, cherry cabinets & stainless appliances, master suite with lots of closet space, dual sinks & separate tub & shower. Offered at $269,000 subject to lender approval of short sale. For more photos and additional detail, visit http://www.12277HabitatWay.com.

Applying for the Home Buyer Tax Credit for a closed escrow after November 6th? You MUST use the correct IRS form...

Taking advantage of the home buyer tax credit as a part of HR 3548, the extension and expansion legislation that was passed November 6th?

The IRS released a new version of Form 5404 last week for folks applying for the tax credit... According to the IRS, you MUST use this new version of the form in order to receive the tax credit.

For the new expanded and extended home buyer tax credit, you need to have closed escrow after November 6th, 2009, and/or be in contract by April 30th and close escrow by June 30th, 2010.

Here is Form 5404 from the IRS website.

Erin's Sacramento Short Sale Experiment, Part V

Time for my fifth installment of Erin's Sacramento Short Sale Experiment! I am sure ya'll are just on the edge of your seats to find out just what has transpired in the world of short sales in our Sacramento metro area since the last time? I have deliberately allowed more time to pass between Part IV and Part V, so that we can see if a trend has truly emerged and also see what the YTD totals for 2009 are. For those of you not following along at home, or perhaps if you are reading this for the first time, my short sale experiment is tracking a few different Sacramento zip codes to see what how the short sale activity increases or decreases over time as compared with traditional resale listings (where there is a seller with equity in a "normal transaction") and to bank-owned resale transactions. My hypothesis at the start of this experiment: the number of short sales will grow over time, as will their dominance in our greater Sacramento marketplace (overall percentage of listings). I have continued to list more short sale properties. Let's see how this new data compares to the "control data" for the experiment and also to last month...

95624 is the section of Elk Grove closest to Hwy 99. As of right this second according to MLS, there are a total of 325 active listings there. 244/325 listings are short sales. The median price in that zip code in December 2009 was $245,000 according to Trendgraphix (an increase over last installment). The result vs. the control data? Control data was 68.6% of all active listings in 95624 were short sales, vs. 68.3% last installment, vs. 75.1% this month. BIG INCREASE over the control data, and a more significant increase over last installment. Number of 2009 closed short sales - 245.

95610 is a section of Citrus Heights. As of right this second according to MLS, there are a total of 170 active listings there. 116/170 listings are short sales. The median price in that zip code in December 2009 was $196,000 according to Trendgraphix (a significant decrease over last installment). The result vs. the control data? Control data was 60.3% of all active listings in 95610 were short sales, vs. 67.3% last installment, vs. 68.2% this month. BIG INCREASE over the control data, and a slight increase over last installment. Number of 2009 closed short sales - 85.

95826 is a section of Rosemont and College Greens. As of right this second according to MLS, there are a total of 121 active listings there. 72/121 listings are short sales. The median price in that zip code in October 2009 was also $181,000 according to Trendgraphix (a decrease from last installment). The result vs. the control data? Control data was 62.2% of all active listings in 95826 were short sales, vs. 74.1% last installment, vs. 59.5% this month = BIG DECREASE. Number of 2009 closed short sales - 65.

95864 is a section of Sierra Oaks, Arden Park, and Arden Manor. As of right this second according to MLS, there are a total of 140 active listings there. 41/140 listings are short sales. The median price in that zip code in December 2009 was $451,000 according to Trendgraphix (a big increase over last installment). The result vs. the control data? Control data was 17.0% of all active listings in 95864 were short sales, vs. 25.8% last installment, vs. 29.3% this month. BIG INCREASE. Number of 2009 closed short sales - 18.

95818 is a section of Midtown, Land Park, and Curtis Park. As of right this second according to MLS, there are a total of 54 active listings there. 14/54 listings are short sales. The median price in that zip code in December 2009 was $424,000 according to Trendgraphix (big increase over last installment). The result vs. the control data? Control data was 16.0% of all active listings in 95818 were short sales, vs. 25.0% last installment, vs. 25.9% this month. BIG INCREASE over the control data, and a slight increase over the last installment. Number of 2009 closed short sales - 15.

95819 is a section of East Sacramento. As of right this second according to MLS, there are a total of 57 active listings there. 12/57 listings are short sales. The median price in that zip code in December 2009 was $310,000 according to Trendgraphix (a decrease over last installment). The result vs. the control data? Control data was 19.7% of all active listings in 95819 were short sales, vs. 22.6% last month, vs. 21.1 this month. Still a BIG INCREASE over the control data, but a slight decrease over last installment. Number of 2009 closed short sales - 11.

So in summary - of the six Sacramento area zip codes I am tracking for my experiment, 4 of them experienced an increase in the number of active short sale listings from last installment, while 5 experienced an increase over the control data...the majority of the zip codes posted pretty large proportional increases, and the one decreasing zip code I am tracking posted a huge proportional decrease. My phone definitely keeps ringing and I continue to receive emails - I am fielding lots of inquiries from homeowners looking for more information and insight from my short sale experience...buyers too are really curious about the short sale process since they are encountering so many short sale listings in our marketplace. Also (you will be aware of this if you follow me on Twitter or Facebook), I closed many of my own short sale listings since the last installment of Erin's Sacramento Short Sale Experiment...in fact I closed an Arden short sale last week, and I have another Sacramento short sale closing next week. Until next time!

Erin's Sacramento Short Sale Experiment, Part I
Erin's Sacramento Short Sale Experiment, Part II
Erin's Sacramento Short Sale Experiment, Part III
Erin's Sacramento Short Sale Experiment, Part IV

Sacramento Real Estate Statistics - December 2009

Hmm. Is it just me, or do the median price statistics in Sacramento County sure seem to look pretty flat for the last year? If you look at the median price in December 2008 vs. that of December 2009, you will actually see an INCREASE of about 5.1%! Perhaps now we have enough data to think this little trough we saw from last January to April was not a fluke - and stability is here to stay? Time will tell. I can tell you that most of the transactions I have been representing for both buyers and sellers, (in all price ranges, short sales, foreclosures, and "regular transactions with a traditional sellers" - yes those DO exist!) are mostly met with multiple offers often resulting in pushing the price over the listing price. If you would like me to email you the Facts and Trends graphs for specific zip codes in Sacramento County, just shoot me an email and I am happy to provide them.

New Listing - 7117 Heather Tree Drive, Sacramento, CA 95842

Adorable Sacramento 3 bed, 2 bath, 1,159sf home is ready for a new owner! You will love the updated kitchen, open floor plan, spacious master bedroom, and the convenient location within minutes of shopping, entertainment and freeway. LOW $60/month HOA dues cover the front yard and common area maintenance. Convenient location close to I-80, shopping, schools and more. Offered at $119,000 subject to lender approval of short sale. For more photos and information, visit http://www.7117heathertreedrive.com/.

HUD Proposes Changes to FHA Loan Program

The US Department of Housing and Urban Development (HUD) announced today that it is planning to make some changes to its FHA loan program. Hmm...the announced changes include:

- Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending. Per HUD's press release, "the first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge." This change will supposedly take place this coming Spring 2010. Eventually, they plan to shift this from an up-front fee increase to an annual premium increase. What does this really mean, in plain english? The FHA mortgage insurance premium is paid by the buyer up front, however the cost is financed into the loan. For example, if your purchase is for $300,000, your "base" loan amount after your 3.5% downpayment is approximately $289,500...the MIP is added to the base mortgage loan amount. Currently, MIP is approximately 1.75%. This would add approximately $5,066.25 to your financed loan amount, making your total financed purchase approximately $294,566.25. With this change, with the MIP being raised to 2.25%, this would add an additional $1,447.50, for a total financed amount of $296,013.75...a difference in monthly payment of about $10 depending on the interest rate?

- Update the combination of FICO scores and down payments for new borrowers. Per HUD's press release, "new borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%." This change will supposedly take place this Summer 2010. What does this really mean, in plain english? Candidly, I really do not anticipating this having a huge impact on FHA lending as it exists. Until now, there has been no minimum FICO score requirement imposed by HUD, however, lenders who fund FHA loans have imposed their own "overlay" requirements. I do not know of ANY lender who currently will fund an FHA loan for a borrower with a credit score below 580 (and really, that number is probably 620). I just hope lenders do not create new "overlay" requirements that raise downpayments for borrowers with credit scores under, say, 640 or something...

- Reduce allowable seller concessions from 6% to 3%. Per HUD's press release, "the current level [at 6%] exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions." This change will supposedly take place this Summer 2010. What does this really mean, in plain english? Candidly, this does suck (for lack of a better way of saying it). While I think it is pretty rare to see a buyer ask for a 6% seller concession (aka, a credit for buyer's closing costs), it is not uncommon to see a buyer ask for 3.5%, or 4% to cover their closing costs. Also, often times a credit will be negotiated after the buyer and seller are in contract to compensate for a repair or something of that nature...now ALL credits will be capped at 3%. Heck...many conventional loans allow more than 3%. It means that buyers will have to come into the transaction with more money...that concept is not a terrible thing, but all of the (probably unintended) consequences of limiting the seller concessions could be really crappy.

So what is the net effect of all of this? If you are an FHA buyer looking for a home, and these changes above will adversely affect your ability to purchase a home, you may want to get in gear and complete your purchase...or, start saving more money for your purchase. If you are a seller, and potential buyers for your home may be using an FHA loan (which in Sacramento, will be MOST sellers), get ready for these changes...you will be capped at a 3% seller concession, so throwing money at a transaction in lieu of repairs may not fly in some cases.

City of Elk Grove Homebuyer Downpayment Assistance Program

Are you a first time home buyer seeking to purchase a home within the City of Elk Grove limits? Well you are in luck! The City of Elk Grove has received grant money from the US Department of Housing & Urban Development (HUD) "Neighborhood Stabilization Program." The program affords eligible first time home buyers up to $60k in the form of low interest, payment-deferred loan toward their downpayment and closing costs!!

Of course there are several buyer eligibility requirements...among the requirements are that the home must be a bank-owned/foreclosed single family home, within the city limits, and the buyer's income must be within the 2009 "moderate income limits."

Think you may qualify? Get more info by downloading the City of Elk Grove's brochure or check out their program fact sheet.

HUD Suspends FHA "Anti-Flip" Rule!!

If you follow me on Twitter, you will already know that I "re-tweeted" an earlier post from the California Association of Realtors regarding a temporary suspension of a HUD lending rule that has prevented many buyers from purchasing "flipped" homes.

What is a "flipped" home? As you can probably guess, this is when an investor purchases a home with the intent to resell it for a profit.

The rule has been that a buyer using an FHA loan can not purchase a flipped home until the title to the home has been held by the current seller for 90 days or more. A couple years ago, HUD excluded bank owned properties from this rule, as there is a change of title from the owner to the bank. Often times however, investors who are flipping property do some improvements to the property and list it within days or weeks of taking title to the property....it is not uncommon when I am looking for properties to show a buyer to see an agent-only remark in MLS stating something like, "Sorry, no FHA loans until 2/15/2010 due to anti-flipping rule." In fact, in 2008 I wrote a blog post about the anti-flipping rule when one of my buyer clients expressed interest in purchasing a flipped home.

Sooo....now, according to HUD, they are going to make an exception to their anti-flipping rule for one year. This new exception to the rule is effective begining February 1, 2010.

I will be VERY curious to see how lenders who fund FHA loans will react to this. Just because HUD will allow flipping, that does not necessarily mean that a lender will permit it. In fact, even with conventional loans, many lenders will not lend on a flipped property. Time will tell!

Buyers - be sure to ask your loan officer about how this rule may affect your ability to purchase a flipped property with an FHA loan. Do not assume that since this new exception to the standing rule has been made that you will be able to actually find a lending institution that will do it.

New Listing - 923 Equinox Loop, Lincoln, CA 95648

Equinox at Lincoln Crossing! This beautifully maintained 3 bed, 2.5 bath courtyard home is better than new, and includes many nice upgrades. You will love the open floorplan, gourmet kitchen, tile flooring, custom paint, window coverings, pre-wiring for surround sound, 2-car garage and beautiful landscaping with stamped concrete patio! Offered at $165,000 subject to lender approval of short sale. For more photos and detail, visit http://923equinoxloop.com/.

New Listing - 2580 W El Camino Avenue #1105, Natomas / Sacramento, CA 95833

Welcome to the Astoria community in Natomas! Come and fall in love with this amazing 2 bedroom, 2.5 bath end unit condo with attached 2-car garage, dual master suites, gourmet kitchen with granite counters, maple cabinets and stainless appliances, and separate living and family rooms. Enjoy the state of the art fitness center, pool and clubhouse just a stone's throw from the front door. Don't wait! Offered aty $169,000 subject to lender approval of short sale. For more photos and additional details, visit http://astorianatomascondo.com/.

Buying a Sacramento Condo? See if the community you like is FHA or VA approved...

I have received several inquiries over the last few months from buyers seeking to purchase condos in Sacramento. Those buyers are enticed by the idea of home ownership for an affordable price, low maintenance living, community amenities (clubhouse, swiming pools, tennis courts, fitness centers), and more. There are many benefits to living condos...heck, the first home I bought at age 19 was a condo.

Many of the buyers who have been contacting me are seeking to use FHA or VA loan programs in order to make their purchase. UGH.

Nothing frustrates me more than having to tell excited would-be condo buyers that the community they absolutely love is not approved for FHA or VA loan programs. You may think - why can't all condos be purchased with these loan programs? Well...I wish I knew the exact answer!! No - in all seriousness, in order to qualify for FHA and VA loan programs, condos must meet certain criteria, and communities / entire associations must be approved by The US Department of Housing & Urban Development for FHA, or The US Department of Veterans Affairs for VA, in advance. At one point in time, there were "spot approval" processes where an individual unit could be approved on a case-by-case basis...but options to do that are limited or just don't exist anymore.

So how do you find out if a condo is VA or FHA approved? There are two online tools that buyers (or sellers, for that matter) can use to look up approved condo communities. The tool to look-up approved condo communities for FHA loans is here, and the tool to look-up approved condo communities for VA loans is here. I use these tools all the time, and find them to be invaluable!

New Listing - 17 Coyote Fork Place, Natomas / Sacramento 95835

Amazing Natomas 3 bed, 2.5 bath 1,519sf home! You will love the upgrades such as the cherry kitchen cabinets and granite slab counters, fabulous master suite with a balcony and luxurious bathroom, and a spacious backyard! Offered at $169,000, subject to lender approval of short sale. For more photos and detail, visit http://17CoyoteForkPlace.com.

A nice way to start 2010!

Today I attended the Officers & Directors Installation Luncheon at the Sacramento Association of Realtors. Our new President for 2010, Barbara Harsch (also a Lyon Realtor) was sworn in, along with the President-Elect, the Secretary-Treasurer, and the members of the Board of Directors.

Along with the installation, there was an awards ceremony to recognize outstanding association members for their contributions in 2009. I was honored to be one of about a dozen association members to be recognized! I received an award for "Oustanding Service in Education." As I mentioned in my final blog post of 2009, last year I was an instructor for multiple classes at SAR, as well as a featured speaker at two conferences for the California Association of Realtors. In 2010, I am already teaching a section for the "Educational Roundtables" (hosted by the SAR Masters Club) taking place later this month on January 29.

Well this was a nice way to start 2010!